S&P Futures Slip as Tariff Fears Reignite, FOMC Meeting on Tap

June S&P 500 E-Mini futures (ESM25) are trending down -0.82% this morning as the latest batch of corporate earnings reports heightened worries about the negative impact of U.S. tariffs on businesses and the global economy, while investors awaited the start of the Federal Reserve’s two-day policy meeting.

Palantir Technologies (PLTR) slumped over -7% in pre-market trading after the data analytics company’s Q1 results fell short of investors’ loftiest expectations, while analysts pointed to weakness in its international sales division. Also, Ford (F) slid more than -2% in pre-market trading after the automaker withdrew its full-year guidance and said it expects a $1.5 billion EBIT impact from auto tariffs this year.

U.S. President Donald Trump on Sunday announced a 100% tariff on foreign-produced films imported into the U.S., and a day later said he plans to unveil pharmaceutical tariffs within the next two weeks. Analysts noted that this marks a notable escalation in the trade saga, adding further uncertainty to the global trade outlook.

In yesterday’s trading session, Wall Street’s main stock indexes ended lower. Zimmer Biomet Holdings (ZBH) plunged over -11% and was the top percentage loser on the S&P 500 after the orthopedic products company cut its full-year adjusted EPS guidance. Also, ON Semiconductor (ON) slumped more than -8% and was the top percentage loser on the Nasdaq 100 after the maker of power chips gave a weak Q2 adjusted gross margin forecast. In addition, Berkshire Hathaway (BRK.A) fell over -4% after legendary investor Warren Buffett said he would step down as CEO of the conglomerate at the end of the year. On the bullish side, EQT Corp. (EQT) rose over +3% after UBS upgraded the stock to Buy from Neutral with a price target of $64.

Economic data released on Monday showed that the U.S. ISM services index unexpectedly rose to 51.6 in April, stronger than expectations of 50.2. At the same time, the final estimate of the U.S. April S&P Global services PMI was revised lower to 50.8 from the 51.4 preliminary reading.

The Federal Reserve kicks off its two-day meeting later in the day. The central bank is widely expected to keep the Fed funds rate unchanged in a range of 4.25% to 4.50% on Wednesday, despite recent pressure from President Trump to cut interest rates. Market watchers’ attention will be on any indications of whether rates might be lowered later this year to support the economy amid tariff-related pressures.

“Uncertainty rules amid a trade war and the ever-changing landscape of tariffs, but with the hard data on consumer spending and employment still hanging in there, the Fed will remain firmly planted on the sidelines,” said Greg McBride at Bankrate.

On the earnings front, notable companies like Advanced Micro Devices (AMD), Arista Networks (ANET), Duke Energy (DUK), Constellation Energy (CEG), Marriott International (MAR), and American Electric Power (AEP) are set to report their quarterly figures today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year.

On the economic data front, investors will focus on U.S. Trade Balance data, which is set to be released in a couple of hours. Economists expect the U.S. trade deficit to widen to -$136.80B in March from -$122.70B in February.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.365%, up +0.51%.

The Euro Stoxx 50 Index is down -1.16% this morning as sentiment was dampened after incoming German Chancellor Friedrich Merz faced an unexpected setback after failing to secure a majority in an initial vote in the lower house of parliament. Uncertainty surrounding U.S. President Donald Trump’s tariff policies also weighed on sentiment after he warned that import tariffs on the pharmaceutical sector could be introduced within the next two weeks, potentially dealing a major blow to this key European industry. Mining stocks led the declines on Tuesday. A survey released on Tuesday showed that the Eurozone economy kept expanding in April, albeit at a slower pace, as demand softened and the dominant services sector nearly stalled, pointing to a still-fragile recovery in the region. Separately, data showed that the Eurozone’s monthly producer prices fell sharply in March. Meanwhile, European Central Bank Governing Council member Yannis Stournaras stated on Monday that the central bank is set to continue lowering interest rates. In other news, industry group SEMI said on Tuesday that the European Union should increase its chip spending fourfold and establish a dedicated budget for it. Investors are now awaiting the Fed’s monetary policy decision on Wednesday. Central banks across Europe will also draw attention, with Sweden’s Riksbank, Norway’s Norges Bank, and the Bank of England scheduled to announce their interest rate decisions on Thursday. In corporate news, Hugo Boss AG (BOSS.D.DX) climbed over +5% after the German retailer posted better-than-feared Q1 sales and reiterated its full-year guidance. At the same time, Kon.Philips N.V. (PHIA.NA) fell more than -2% after the Dutch healthcare technology company slashed its full-year profit margin guidance.

Eurozone’s Composite PMI, Eurozone’s Services PMI, and Eurozone’s PPI data were released today.

Eurozone April Composite PMI came in at 50.4, stronger than expectations of 50.1.

Eurozone April Services PMI stood at 50.1, stronger than expectations of 49.7.

Eurozone March PPI has been reported at -1.6% m/m and +1.9% y/y, weaker than expectations of -1.4% m/m and +2.0% y/y.

China’s Shanghai Composite Index (SHCOMP) closed up +1.13%, while Japan’s financial markets were closed for a holiday.

China’s Shanghai Composite Index closed higher and hit a 1-month high today as trading resumed after a five-day holiday, with sentiment supported by signs of easing trade tensions with the U.S. and data indicating resilient domestic consumption. Telecom and technology stocks outperformed on Tuesday. The gains followed comments from U.S. Treasury Secretary Scott Bessent, who said the U.S. could see some “substantial progress in the coming weeks” in trade negotiations with China. That came after U.S. President Donald Trump stated over the weekend that he is open to reducing tariffs on China at some point. Meanwhile, spending by Chinese travelers during the May Day holiday climbed 8% year-over-year to 180.27 billion yuan ($24.92 billion), though it remained below pre-pandemic levels, while China’s tourism ministry reported 314 million domestic trips during the holiday, up 6.5% year-over-year. Jason Chan, a senior investment strategist at Bank of East Asia, said, “The Labor Day holiday travel and consumption figures are doing quite well, indicating the service consumption growth momentum is still intact.” The data seem to have alleviated worries about weakening growth after a private-sector survey revealed that China’s services activity expanded at the slowest rate in seven months in April. In other news, Citi analysts said in a note that the People’s Bank of China might lower banks’ reserve requirement ratio as early as May, while adding that policymakers are likely to remain cautious about introducing broader stimulus measures. In corporate news, Fulongma gained over +4% after securing three sanitation service projects valued at 244.6 million yuan in April.

The Chinese April Caixin Services PMI arrived at 50.7, weaker than expectations of 51.7.

Japan’s Nikkei 225 Stock Index was closed today for the Greenery Day holiday. The markets will reopen on Wednesday.

Pre-Market U.S. Stock Movers

Palantir Technologies (PLTR) slumped over -7% in pre-market trading after the data analytics company’s Q1 results fell short of investors’ loftiest expectations, while analysts pointed to weakness in its international sales division.

Ford (F) slid more than -2% in pre-market trading after the automaker withdrew its full-year guidance and said it expects a $1.5 billion EBIT impact from auto tariffs this year.

Hims & Hers Health (HIMS) fell over -5% in pre-market trading after the health and wellness company provided weaker-than-expected long-term sales guidance.

Comcast (CMCSA) dropped about -1% in pre-market trading after Argus downgraded the stock to Hold from Buy.

Upwork (UPWK) surged over +11% in pre-market trading after the platform for freelancers posted upbeat Q1 results.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - May 6th

AMD (AMD), Arista Networks (ANET), Duke Energy (DUK), Transdigm (TDG), Constellation Energy (CEG), Zoetis Inc (ZTS), Marriott Int (MAR), American Electric Power (AEP), Energy Transfer (ET), Marathon Petroleum (MPC), Coupang LLC (CPNG), Suncor Energy (SU), Fidelity National Info (FIS), Electronic Arts (EA), Datadog (DDOG), WEC Energy (WEC), Gartner (IT), IQVIA Holdings (IQV), Corpay (CPAY), Archer-Daniels-Midland (ADM), Waters (WAT), IFF (IFF), GlobalFoundries (GFS), Devon Energy (DVN), Global Payments (GPN), Super Micro Computer (SMCI), Leidos (LDOS), Kinross Gold (KGC), Gen Digital (GEN), Rivian Automotive (RIVN), Jacobs Engineering (J), Ball (BALL), Jack Henry&Associates (JKHY), UL Solutions (ULS), Astera Labs (ALAB), American Financial (AFG), Assurant (AIZ), Mosaic (MOS), Ovintiv (OVV), Aramark Holdings (ARMK), Klaviyo (KVYO), Wynn Resorts (WYNN), Celsius (CELH), Masimo (MASI), Topbuild Corp (BLD), Ingredion (INGR), Halozyme (HALO), Sunoco LP (SUN), Lucid Group (LCID), Jazz Pharma (JAZZ), Azek Company (AZEK), KBR (KBR), Fortune Brands (FBIN), Sarepta (SRPT), Colliers International (CIGI), Louisiana-Pacific (LPX), CCC Intelligent Solutions Holdings (CCCS), Voya Financial Inc (VOYA), Chord Energy (CHRD), Knife River (KNF), Grand Canyon Education (LOPE), Cirrus (CRUS), Varonis Systems (VRNS), Upstart (UPST), Lear (LEA), Qualys (QLYS), Krystal Biotech (KRYS), Intapp (INTA), Coty (COTY), Novanta (NOVT), Cytokinetics (CYTK), Lumentum Holdings Inc (LITE), Archrock (AROC), Triple Flag Precious Metals (TFPM), Arcosa (ACA), Sealed Air (SEE), IAMGold (IAG), Ultragenyx (RARE), Kontoor Brands (KTB), Gulfport Energy Operating (GPOR), Enpro Industries (NPO), Global Business Travel (GBTG), PTC Therapeutics (PTCT), Mercury General (MCY), California Resources (CRC), Blackline (BL), Avient Corp (AVNT), Mercury (MRCY), DigitalOcean Holdings (DOCN), Douglas Emmett (DEI), Baldwin Insurance (BWIN), Driven Brands Holdings (DRVN), IPG Photonics (IPGP), Resideo Tech (REZI), Genius Sports (GENI), VSE Corporation (VSEC), Powell Industries (POWL), Lemonade (LMND), Teradata (TDC), SSR Mining (SSRM), LCI Industries (LCII), Enlight Energy (ENLT), Energizer (ENR), Premier Inc (PINC).